A documentary about the forced eviction of 3000 squatters from a shanty town in Port Moresby can be shown after a court threw out a legal challenge by one of the film's central figures, Dame Carol Kidu, the Australia-born former opposition leader of Papua New Guinea.

In a damning finding for the revered politician, Supreme Court Justice Nigel Rein has questioned Dame Carol's credibility as a witness and dismissed her claim that she thought she was taking part in a school assignment and did not know that novice Australian filmmaker Hollie Fifer was producing a feature documentary to be shown all over the world.

The 77-minute documentary, The Opposition, revolves around the day in 2012 when an Australian-linked company sent in bulldozers, accompanied by armed PNG police, to raze the historic shanty town on Paga Hill.

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The development company is transforming the $300 million harbourfront site into a hotel and marina precinct that could play host to the 2018 APEC leaders' summit.

Legal action ... Dame Carol Kidu in a scene from the original version of The Opposition.

In 2012, Ms Fifer followed Dame Carol into Paga Hill, located in her electorate, as the politician pleaded unsuccessfully with police to stop people's homes being bulldozed.

Footage shows her telling police: "This is not an eviction, it's a demolition . . . why should some f----g foreign company get our hill?".

But by late 2013, the landscape had changed fundamentally.

Having retired from politics, Dame Carol, had been hired as a consultant to Paga Hill Development Company, owned by Australian-Icelandic businessman Gudmundur "Gummi" Fridriksson, a former chief executive of Noel Pearson's Cape York Institute, who lives in Cairns.

Dame Carol later presented the company with a letter in which she formally resiled from her criticism of the eviction, saying: "In hindsight, Paga Hill Development Company's efforts to achieve harmonious resettlement have been genuine".

"Please accept this letter as my formal notification that I no longer stand by my 2012-2013 statements, which were based on the limited information at the time," she wrote.

It came out in the hearing that Dame Carol had been paid $178,000 for work with Paga Hill and the company had paid $250,000 to run her case against Ms Fifer.

The case to permanently block the documentary being shown was based on Dame Carol's claim she had agreed to be filmed as part of what she thought was a film school assignment rather than a commercial documentary venture.

Evidence was produced during the trial of multiple emails and text messages in which Ms Fifer told Dame Carol about seeking ABC funding and the politician also signed a release form that Ms Fifer needed to obtain film funding.

In a stinging verdict, Justice Rein noted: "When one views the extreme weaknesses of [Dame Carol's] claim that she did not know on and from March 7, 2012, that Ms Fifer was hoping to make a documentary for public exhibition rather than a student assignment (whatever its topic) the impression gained is that [Dame Carol] is prepared, for her own benefit and that of PHDC, to say anything to stop the footage taken of her by Ms Fifer being broadcast."

"In my view, the plaintiff's assertion that she was not informed by Ms Fifer of her wish and intention to make a documentary quite unconnected with the student assignment ... is without any foundation whatsoever," Justice Rein found.

He said there were "several indications" that Dame Carol was angry with the documentary quite removed from the issue of her consent.

Those included that "she feels that some people will, or do, think that she 'sold out' her former constituents at Paga Hill by joining forces with PHDC and receiving payments for her service", he noted.

In a statement issued by producers Media Stockade and Beacon Films, Ms Fifer said she was "relieved that justice has been served and that audiences around the world will be given the opportunity to see The Opposition".

"The Paga Hill community is filing for damages in the PNG courts for the loss of their homes and human rights violations. The Opposition is also their evidence base because most of their documents were destroyed during numerous demolition exercises that were carried out," she said.

The documentary, which received funding from Screen Australia and Screen NSW, will be shown at a number of international film festivals.

On Thursday, Dame Carol said she was disappointed with the verdict and still believed the documentary only told "part of a much bigger story" and that the majority of settlers had agreed to move and accept a new block of land elsewhere.

"I was disappointed but I accept the decision of His Honour," she said.